The Wisdom of Good to Great

I have repeatedly advocated reading Jim Collins’ extraordinary book, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, as a must read for hospitality managers, particularly those in standalone operations who suffer from limited resources and no economies of scale. The book is of special importance to such properties because they have neither the time nor resources to waste on the flavor-of-the-month business strategies to discover the driving formulas of success.

Over the years I have discussed the book’s empirical findings with business leaders and managers from a number of different industries and I find the same level of interest and praise for the work of Collins and his research team. In yet another effort to stimulate the interest of hospitality managers, I offer the following sampling of quotes from the book.

In speaking of business “coherence,” a term from physics that describes the magnifying effect of one factor upon another, Collins says, “Each piece of the system reinforces the other parts of the system to form an integrated whole that is much more powerful than the sum of its parts. It is only through consistency over time, through multiple generations, that you get maximum results.”

Talking about “core values,” he says, “The point is not what core values you have, but that you have core values at all, that you know what they are, that you build them explicitly into the organization, and that you preserve them over time.”

A student once asked Collins why he should try to build a great company; wasn’t success enough? Collins answer was, “I believe that it is no harder to build something great than to build something good. It might be statistically more rare to reach greatness, but it does not require more suffering than perpetuating mediocrity.”

In discussing the importance of the right people, he offered three simple truths:

“If you begin with ‘who’ rather than ‘what,’ you can more easily adapt to a changing world.”

“If you have the right people on the bus, the problem of how to motivate and manage people largely goes away.”

“If you have the wrong people, it doesn’t matter whether you discover the right direction, you still won’t have a great company. Great vision without great people is irrelevant.”

“In a good-to-great transformation, people are not your most important asset. The right people are.”

“Rigor in a good-to-great company applies first at the top, focused on those who hold the largest burden of responsibility.”

“When you know you need to make a people change, act.”

“The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The best people don’t need to be tightly managed. Guided, taught, led – yes. But not tightly managed.”

“Letting the wrong people hang around is unfair to all the right people.”

“If we’re honest with ourselves, the reason we wait too long often has less to do with concern for that person and more to do with our own convenience.”

Talking about charismatic leaders, Collins said, “Throughout the study, we found comparison companies where the top leader led with such force or instilled such fear that people worried more about the leader – what he would say, what he would think, what he would do – than they worried about external reality and what it could to do the company.”

Avoiding the pitfalls of charismatic leadership, “Yes, leadership is about vision. But leadership is equally about creating a climate where the truth is heard and the brutal facts are confronted. There’s a huge difference between the opportunity to ‘have your say’ and the opportunity to be heard. The good-to-great leaders understood this distinction, creating a culture wherein people had a tremendous opportunity to be heard and, ultimately, for the truth to be heard.”

On three intersecting circles of the Hedgehog Concept, “For the comparison companies, the exact same world that had become so simple and clear to the good-to-great companies remained complex and shrouded in the mist. Why? For two reasons. First, the comparison companies never asked the right questions, the questions prompted by the three circles. Second, they set their goals and strategies more from bravado than from understanding.”

Exploring a culture of discipline, “[Georg Rathman] understood that the purpose of bureaucracy is to compensate for incompetence and lack of discipline – a problem that largely goes away if you have the right people in the first place. Most companies build their bureaucratic rules to manage a small percentage of wrong people on the bus, which in turn drives away the right people on the bus, which then increase the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth.”

Freedom and responsibility within the framework of a highly developed system. “The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility with the framework of that system. They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people.”

“Technology alone cannot sustain great results.”

“Mediocrity results first and foremost from management failures, not technological failure.”

The flywheel effect. “Good to great comes about by a cumulative process – step by step, action by action, decision by decision, turn by turn of the flywheel – that adds up to sustained and spectacular results.”

“Much of the answer to the question of “good to great” lies in the discipline to do whatever it takes to become the best within carefully selected arenas and then to seek continual improvement from there. It’s really just that simple.”

Do yourself a favor and get a copy of this extraordinary book. Read it, study it, figure out how to go about applying its guidance in your organization. Properly understood and implemented, you’ll find yourself in the midst of an extraordinary enterprise.

As one leader of a top-tier club said, “Thank you for turning me onto Good to Great – I have been listening to it on my ipod and it is fantastic!”

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.